Bank of America has launched a system to enable digital payment flows for its commercial customers holding deposits at the bank’s branches in Canada.
According to the bank, the system — Global Digital Disbursements — places it as the first to offer both consumer to business (C2B) Request for Pay and business to consumer (B2C) digital payment flows.
Canada is the first market where the Request for Pay feature will be available via the system, enabling a company to send invoices to customers via text or email along with a link to pay the amount, driving faster receipt of payment.
Efficiency savings
The system enables the processing of multiple B2C payments and C2B collections where the identifier is the person’s email address or mobile phone number. The solution is both a cost-efficient and customer-friendly payments option for companies wanting to replace cash or cheque payments.
Leslie Konecny, head of product for global transaction services, Canada at Bank of America, says: “Global Digital Disbursements offers our clients fast digital payments and request for payments to consumers in Canada. The payments are sent with enhanced ISO [International Standard Organisation] remittance data, and companies don’t have to store their payees’ sensitive banking information.”
She explains: “A core tenet of our role is to create solutions that are globally consistent but which address the needs and requirements of various geographies. Global Digital Disbursements is an example of that, where we have developed a consistent solution that works across multiple jurisdictions by connecting to various payment networks.”
These include Zelle in the US, Interac in Canada and PayPal internationally. “Clients access it from the same banking platform, CashPro, that they use for all their transaction banking needs,” adds Ms Konecny. “We continually look for ways to help our clients remove paper from their operations, which leads to reduced expenses, greater efficiencies and improved velocity of payments.”
Maureen Jarvis, head of global transaction services, Canada at Bank of America, says: “It’s important for our clients to be able to get access to Interac so that they can connect with consumers digitally. Canada has been a long-standing paper-intensive payments country, just like the US.”
The system was developed in response to high demand from the bank’s clients, according to Ms Konecny. “They want the ability to capture remittance data in an electronic payment and replace wire or paper cheque payments. Because Interac is ISO enabled, Global Digital Disbursements allows them to do this. Interac has national ubiquity here — it’s a very mature payment network,” she says.
Global Digital Disbursements shares characteristics of the European Payments Council’s Sepa Request-to-Pay (RTP), which lets European companies request physical or online payments (up to €100,000) from customers, says Ms Konecny.
RTP is a means to request a payment initiation. It is a complement to the payment flow, supporting the end-to-end process between an underlying commercial transaction and the payment itself.
There are many schemes currently being introduced around the globe around requests to pay. Ms Konecny says that “this one is similar to the capabilities of Sepa in that it allows the creditors to send the payment request directly to the consumers, giving beneficiaries greater control over their collections. In that sense, it’s a similar scheme, both secure and digital”.
Development difficulties
The biggest challenge faced by the bank in the development of this system, according to Ms Konecny, was the Covid-19 lockdown.
“The global pandemic illustrated very quickly and clearly to our clients how important it was for them to have digital alternatives to paper solutions,” she says. “The challenge, and certainly the rewarding experience, was that we were able to develop, build and deploy this product via the CashPro platform in an entirely virtual environment with all of our stakeholders co-operating together, coming together virtually.”
More digital developments
The launch of Global Digital Disbursements in Canada follows the bank’s 75th anniversary in the country. “This much anticipated launch speaks to our commitment to local innovations in financial services that help our clients realise cost savings and a competitive edge,” she says.
Opportunities for the use of Global Digital Disbursements varies by industry and includes insurance companies that leverage its speed to make claim settlements. Companies in the technology sector appreciate the convenience of the solution to pay freelance employees or gig workers, without the need to manage financial information. In emergency situations, non-profits also value the ability to send financial relief electronically to people who may be physically displaced.
The bank cites the system’s use as digital settlement of insurance claims or agent commissions, as a means to make an instant payment to gig economy freelance workers, make instant reimbursements for airline overbooking or, with regard to healthcare, make clinical trial participant payments or patient reimbursements.
